Key takeaways
By 2025, capital linked to oil from the Gulf, including sovereign wealth funds, family offices, and private banking networks, has become a significant force in Bitcoin’s liquidity dynamics.
These investors are primarily entering Bitcoin through regulated channels, such as spot ETFs.
Abu Dhabi has emerged as a central player in this transformation, bolstered by substantial sovereign-linked capital and the Abu Dhabi Global Market, which acts as a regulated hub for global asset managers and crypto market intermediaries.
Investors with oil wealth cite diversification, long-term portfolio construction, generational wealth demands, and opportunities to establish supporting financial infrastructure as major reasons for their interest.
Since Bitcoin (BTC) began its first sustained boom in 2013, many of its substantial price spikes have been fueled by highly leveraged retail activity on less-regulated platforms. Following the launch of the first U.S. Bitcoin exchange-traded fund (ETF), the ProShares Bitcoin Strategy ETF (BITO), on October 19, 2021, Bitcoin attracted considerable attention from institutional investors.
In 2025, a fresh source of capital began to significantly influence Bitcoin’s market structure: oil-linked funds from the Gulf region. This influx includes sovereign wealth funds, state-affiliated investment firms, family offices, and the private banking networks serving them.
These pools of capital are entering the market through regulated channels, particularly through spot Bitcoin exchange-traded funds (ETFs). Such inflows could catalyze the next wave of liquidity, not just resulting in temporary price increases, but also supporting narrower bid-ask spreads, deeper market depth, and the ability to facilitate larger trades with minimal price impact.
This article explores how investors linked to the oil sector might affect crypto market liquidity, describes potential future liquidity waves, and analyzes why these funds find Bitcoin appealing. Additionally, it emphasizes Abu Dhabi’s role as a regulated center and the practical limits of liquidity.
Who these oil-linked investors are and why they matter for market liquidity
“Oil-rich investors” refers to a network of capital managers whose resources are connected, either directly or indirectly, to hydrocarbon revenues:
Sovereign wealth funds and government-related organizations in the Gulf, which manage extensive asset bases and often influence regional investment trends.
Ultra-high-net-worth individuals and family offices, which generally act more swiftly than sovereign funds and typically channel demand through private banks and wealth advisors.
International hedge funds and asset managers that are establishing bases in Abu Dhabi and Dubai, attracted in part by proximity to regional capital.
For liquidity, the crucial factor is not only the scale of these allocations but also their deployment. Many of these investments are processed through channels and platforms designed for institutional participation, thus enhancing overall market structure.
Did you know? Spot Bitcoin ETFs do not hold futures contracts; instead, they hold Bitcoin in custody. This means that net inflows generally necessitate purchases of BTC in the spot market, linking investor demand directly to spot liquidity rather than derivatives-based exposure.
What the next liquidity wave actually means
From a market-structure perspective, a liquidity wave is typically defined by:
More consistent daily flows into regulated products instead of short-term spikes.
Deeper order books and tighter spreads in spot markets.
Increased primary-market ETF activity, including share creations and redemptions, which generally involves professional hedging.
Stronger, more resilient derivatives markets, including futures and options, bolstered by regulated venues and clearing services.
A key distinction from previous cycles is the evolution of market infrastructure. Spot Bitcoin ETFs offer a familiar, regulated vehicle for traditional investors. Additionally, prime brokerage services, institutional custody, and regulated trading hubs have lowered operational barriers for large-scale allocations.
Did you know? Authorized participants, not ETF issuers, typically manage Bitcoin buying and selling related to ETF flows. These major financial firms create and redeem ETF shares and may hedge in both spot and derivatives markets, influencing daily liquidity behind the scenes.
Abu Dhabi-linked conservative capital flows
Spot Bitcoin ETFs have provided a clear route for this type of capital. The structure and risk profile of crypto ETFs, such as BlackRock’s iShares Bitcoin Trust (IBIT), differ from traditionally registered funds. These distinctions are crucial for investors focused on governance and compliance.
In the third quarter of 2025, the Abu Dhabi Investment Council enhanced its Bitcoin exposure by increasing its position in IBIT. A regulatory filing revealed the fund raised its stake from approximately 2.4 million shares to nearly 8 million by September 30, with the position valued at about $518 million at quarter-end based on the closing price.
These figures indicate that Gulf-based capital is gaining Bitcoin exposure through U.S.-regulated listings. Even with straightforward ETF purchases, such inflows can bolster liquidity, as market makers and authorized participants may hedge exposure across spot and derivatives markets as flows fluctuate.
Why Abu Dhabi’s oil-linked capital is interested in Bitcoin
Several overlapping reasons motivate oil-rich investors to consider Bitcoin:
Diversification and long-term portfolio strategy: Gulf investors, especially those connected to sovereign entities, often seek long-duration themes, diversification, and global opportunities. Some institutions view Bitcoin as a potential long-term store of value, akin to gold in multi-asset portfolios, although Bitcoin’s risk profile and volatility are substantially different.
Generational shifts in private wealth: Wealth managers in the UAE report growing client interest in regulated digital asset exposure, especially among younger high-net-worth investors. This trend has encouraged traditional platforms to enhance access through regulated products and venues.
Building supporting infrastructure: Beyond direct investments, some regions are investing in crypto market infrastructure, including regulated exchanges, custody solutions, and derivatives platforms. These systems can reduce operational friction for institutional participation and may promote more sustainable liquidity over time.
Did you know? Many spot Bitcoin ETFs engage multiple custodians and insurance layers. This arrangement aligns with institutional risk management standards and reassures conservative investors who would never self-manage private keys.
Geography matters: The UAE’s role as a regulated hub
Liquidity tends to concentrate when regulation, licensing, and institutional counterparties are dependable. The UAE has established a multi-layered framework that combines federal oversight with specialized financial free zones, such as the Abu Dhabi Global Market (ADGM).
Various developments have bolstered ADGM’s position as an institutional base. For instance, Binance obtained regulatory approval under the ADGM framework.
According to a Reuters report, ADGM has experienced rapid growth in assets under management, which the report linked to its proximity to Abu Dhabi’s sovereign capital pools. When market makers, prime brokers, hedge funds, and wealth platforms cluster in one jurisdiction, it can facilitate continuous two-way flow, enhanced hedging activity, and tighter pricing.
How oil-linked capital can strengthen Bitcoin liquidity
Inflows from sovereign wealth funds related to the oil economy can introduce additional layers of institutional demand to the Bitcoin market, potentially enhancing liquidity and market depth.
The ETF flywheel: Institutional purchases via spot ETFs can initiate share creations, hedging activities, and related trading by professional intermediaries. This can boost turnover and narrow spreads, especially with steady inflows.
Large over-the-counter trades and prime brokerage: Major investors often prefer block trades and financing options to minimize market impact. This approach can motivate intermediaries to commit capital and enhance execution services.
Regulated derivatives and clearing: An advanced, regulated derivatives ecosystem can improve price discovery and risk transfer while allowing market makers to manage risk more efficiently, which may lead to tighter quotes in the spot market.
Did you know? Spot Bitcoin ETFs are traded during stock market hours, while Bitcoin operates 24/7. This discrepancy can create price gaps at the stock market open, particularly after significant overnight price movements or weekend volatility in cryptocurrency markets.
Institutional exits and the limits of liquidity
Institutional involvement does not eliminate downside risk. Bitcoin remains volatile, and even extensively utilized products can experience sharp withdrawals.
For example, Reuters reported that BlackRock’s iShares Bitcoin Trust (IBIT) underwent a record single-day net outflow of approximately $523 million on November 18, 2025, amid a broader pullback in the crypto market. Factors such as profit-taking, declining momentum, and a shift toward gold were cited.
Access availability doesn’t guarantee sustained allocation. Liquidity is bidirectional, meaning the same infrastructure conducive to large inflows can also facilitate rapid exits.
Governments also influence the regulatory landscape. Changes in policy and oversight can expand or limit how funds engage with Bitcoin-linked products and sometimes with Bitcoin itself.
